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Microsoft Says Buying Activision Blizzard Creates Competition

According to CNBC, Microsoft CEO Satya Nadella says the acquisition of Activision Blizzard is to create competition in mobile games. However, the deal faces anticompetitive investigations worldwide. 

“Our entire goal is to bring more options for gamers to be able to play [on every platform],” said Nadella. “[A]nd for publishers to have more competition.”  

Microsoft Gaming CEO says Activision Blizzard is for Candy Crush, not Call of Duty.

In an interview, Phil Spencer, head of Xbox and CEO of Microsoft Gaming, said Candy Crush is the real target. The acquisition would bring Microsoft in line to compete with giants like Tencent in the mobile games market.

“I’m looking at the Activision Blizzard numbers. […] There’s Activision, there’s Blizzard, and then there’s King, which is the division that makes Candy Crush.” Spencer said. “King makes more than Activision Blizzard. Candy Crush makes more than Activision Blizzard.”

Notably, Call of Duty (CoD), Activision Blizzard’s highest-earning franchise, is at the heart of the antitrust investigations. The newest entry, a remake of 2009’s Call of Duty: Modern Warfare 2, is the all-time fastest-selling CoD. According to IGN, the game surpassed $1 billion in sales worldwide in just ten days. 

According to Business of Apps, Candy Crush Saga made $1.2 billion in 2021. Though CoD earned nearly as much in less than two weeks, mobile games are far less expensive to produce. Additionally, Candy Crush’s developer, King, generated over $1.1 billion in income in 2021. 

However, according to Activision Blizzard’s Q3 2022 earnings report, the company generated $1.78 billion in the fiscal year 2022. And that’s not including their most lucrative time of year, the holiday season.

Microsoft is expanding its gaming empire.

Microsoft already owns a slew of game developers (23) responsible for some of the most popular games in the world. For example, they own Bethesda Games, the creators of the hit shooter franchise DOOM, which faces controversy for its musical score. They also own Mojang Studios, the developer of the best-selling game of all time, Minecraft, which surpassed Tetris in 2019.

An Xbox mobile gaming arm built on the backs of Candy Crush and CoD: Mobile gives Microsoft more industry power. Though Sony’s PlayStation 5 currently outsells the Xbox Series X/S, Microsoft has a more significant lateral presence in the industry. Of course, you must include PC gaming as part of the conversation. 

The company already has a strong presence in mobile gaming with Minecraft: Mobile Edition. Which, according to Statista, generated just over $161 million in 2021. Although, that’s a drop in the bucket compared to the revenue of Candy Crush Saga and CoD: Mobile. Regardless, Microsoft looks to compete with Apple, Google, and Tencent in the mobile gaming space.

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